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6 Key Insights from The CEO Of CapitaLand Commercial Trust’s Manager

CapitaLand Commercial Trust  (SGX: C61U) is the largest real estate investment trust in Singapore that focuses on commercial properties. Right now, it has stakes in 10 different prime commercial properties in Singapore and its ownership interests are collectively valued at S$8.5 billion.

Given the REIT’s heft, there may be interesting things to learn from it. Last week, Lynette Leong, the chief executive officer of CapitaLand Commercial Trust’s manager, was featured in an interview on SGX’s kopi C series.

From there, I picked out six key insights that may be useful for investors.

1. A woman’s touch

2. No to status quo

3. More than meets the eye

For the first three insights, head here.

4. An eye for the future

Looking to the future, Leong shared her thoughts on the rise of millennials and the changes the generation may bring. She said:

“Millennials, who are tomorrow’s leaders, will not want to sit in an office all day – they prefer to move around with their tablets and laptops, and work in all sorts of places. They also want to engage more, collaborate more, and have work-life balance.”

She believes that globalisation, a mobile workforce, and the ease of access to digital technology are set to change the concept of the working environment. In turn, CapitaLand Commercial Trust, as an owner of offices, will have to adapt in the future.

5. A tenant’s market in an uncertain business environment

CapitaLand Commercial Trust is operating in a tenant’s market right now, which is to say that tenants have many choices to pick from. The REIT will have to adapt to the needs of customers. Leong said:

“Due to uncertainties in the business environment, our customers want more flexibility in their lease terms or step-up lease payments. We’re studying these options.

It’s all about creating a flexible and conducive work environment so as to enhance tenant retention”

Shorter leases could be the way for businesses to manage an uncertain environment while the supply situation in the office market works itself out.

6. A recovery in 2018?

The domestic office market is dealing with a sharp increase in supply in 2016. In Leong’s view, the commercial rental market will start to rebound in late 2017. She said:

“My sense is that it will likely be a 2018 recovery, as there is still much supply to be absorbed. However, when the market recovers, it could be a sharp rebound. Supply is now an issue, but demand is beginning to catch up.”

Over the long term, Leong believes that the relatively low supply in the core CDB (Central Business District) area will keep demand stable for quality office space in Singapore.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Singapore Exchange. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.